Now that the decision had been made that I would be a newbie writer the first choice I needed to make was whether I should pursue my career in my name or to create a company, in other words a legal entity, which would separate my writing revenue from my personal financial affairs. A debate that took all of 30 seconds. My small and home business ownership background may the choice obvious. And any new business needs a business plan.
There are several reasons you would want to create a legal entity to handle your business as opposed to doing it in your own name. The primary one is that risk and rewards are separated, so if the business fails the debts incurred by the business belong to the business, and creditors cannot sue you in your personal capacity to recover monies owed by the business. This secures your personal assets such as your house, car, and policies. If the business transactions are done in your personal capacity, all debts incurred are your responsibility.
The second is copyright. Everything you write is legally yours and cannot be used by others without your express authority, and yes, that includes the blog posts on your website. Something worth remembering if you ever think of copying other authors or bloggers content without their permission.
Here is a podcast which discusses the importance of creating a company and protecting your copyright.
So, my advice is to establish a legal business entity, perhaps a publishing company which is what I intend to do. Why a publishing company? Well, my business model tells me I will write and publish my own books. Some authors also publish books written by others.
This leads me to the second question. Am I going to self-publish or use traditional publishers? From what I had uncovered during my early research, this again was an easy choice—I will self-publish all my works.
It was now time to draft my business model.
Whether you are a budding writer, a plumber or intend to sell commodities online, you need a plan as to how to will go about it to ensure the eventual success of your venture. You need a Business Plan or at least a plan for your business. Irrespective of your choice of business, the fundamentals of launching and sustaining a new business are the same.
My advice to any new entrepreneur is to take your time with compiling your plan, there are many questions that need to be asked and answered and the one I most frequently got from my new start-up mentees was “what questions do I need to ask?”.
The first question you need to ask is where do I start? Surprise, surprise—the answer is with a plan for your business.
Most business plans address the same principles, the most common of which relate to the structure of your company, the product/s you propose selling, how you intend to approach the market, your funding model and where you hope to take the business in the medium to long term.
This is what my plan looks like, or at least a summarized version of it.
What type of company will I form?
In my country the best and most popular choice is what is referred to as Proprietary Limited or (Pty) Ltd company which means the risks are limited to the company, as explained above. My guess is the equivalent in the US and UK is an LLC company, but you need to find out which option best suits you in your respective countries.
What business will it transact?
Write and publish fiction and non-fiction books to begin with.
Who will own it?
Depending on the structure of the company you choose, it may have directors who are also shareholders, shareholders who own part of the company, but do not participate in the day-to-day running of the company—these are often financial backers, or just has the owner.
If the business comprises only you, then you are the owner, CEO, CFO, Office manager and worker and general bottle and coffee cup washer. You are the company and the company is you. An important point to remember when it comes to branding and portraying the image of the company name and profile.
If you decide on a partner, it is imperative that a formal agreement is drafted detailing the roles, responsibilities and accountabilities of each partner, where it relates to financial contributions and earnings and settlement of debt. The same rule applies if you borrow money to launch your venture. Get formal contracts drawn up by a professional; do not rely on handshake agreements!
What is my marketing and selling plan?
If you are the owner and only employee of the company, you will need to take on both roles. I’m not going to get into what the differences between the 2 functions are that is a topic best explained in a book. Suffice to say you needn’t concern yourself with it at this early stage.
You need to decide how you will get the attention of Joe or Josephine Public to find your book/s and buy them. Unless you’re Stephen King launching your first book on Amazon without telling all and sundry about it will probably result in zero sales. That means you need to badger all your family members, friends, social media besties and not-so besties, and anyone else who may be interested in buying your book and leaving 5-star reviews. And we all know how reliable some family members and friends can be.
But you also need to be thinking longer term. Advertising campaigns for Amazon, Google and social media sites, launching a website and/or podcast to market your efforts and perhaps signing up to social media sites new to you are all alternatives. Some cost money, others don’t. You will need to do the research and document your plan going forward. But having a plan of action is crucial.
How will I fund the venture?
Unless you have access to a pot of cash stashed under your bed or have excess income from other sources, it is possible you launch your writing career while working full time elsewhere and your current income is needed to cover household related expenses. This means you may have to “bootstrap” the business or use the “plow-back” method. Either way, start-up funds are limited and so you need to allocate what resources you have and spend wisely.
If you read my About Me page, you would know that I consciously elected to see whether I could launch a writing career with minimal cost to me. I want to see if it is possible for someone with little or no financial support to become a successful writer. That is my choice but if you can avoid doing it the hard way, then I would suggest you do. You’ll have enough other worries with the business without adding financial ones if it’s avoidable.
Is there a growth plan?
By growth I don’t mean writing more books. The idea here is to be thinking about what other saleable products you could create that would subsidize your writing income. For example, many successful authors have developed and sell courses for new writers or designed apps and tools to help writers or publish other authors books. One of my growth plans is to design a course around my book The Home business Owners Start-up Guide; a course on how to start your own home-based business. I have several other ideas which I will market through my website that may only indirectly relate to writing.
Be thinking about the medium to long-term opportunities to generate additional income.
I cannot overemphasize the importance of developing a plan for your new business, and not just in your head! Get it down on paper. It doesn’t have to be a literary masterpiece, but it must be implementable and achievable. It also needs to be a working document that you may need to revise from time to time so keep it safe. And if you flounder at times or feeling at a loss as to what to do next, go back and read it. A well devised and compiled business plan is worth a ton of gold.
Please leave a comment or contact me directly if you have any questions or need help in compiling your plan.